TIDMCOG
RNS Number : 6424Z
Cambridge Cognition Holdings PLC
22 September 2020
22 September 2020
Cambridge Cognition Holdings plc
("Cambridge Cognition", the "Company" or the "Group")
Interim Results for the six months ended 30 June 2020
Cambridge Cognition Holdings plc (AIM: COG), which develops and
markets digital solutions to assess brain health, announces its
unaudited interim results for the six months ended 30 June
2020.
The first half of 2020 saw strong progress in executing the
Company's strategy of an increased focus on commercialisation. This
was demonstrated by GBP4.93 million of contract wins in the first
half of 2020, an increase of 87% on the same period in 2019.
Further contracts have been secured post period end with orders
from 1 January 2020 to 31 August 2020 now standing at GBP8.36
million. The spread of contracts won across the product portfolio
demonstrates that the Company's product strategy is delivering with
revenues increasing materially over H1 2019 and losses cut
significantly. While a number of contracted clinical trials have
been delayed by COVID-19, this was offset by the commencement of
new contracts as the business showed resilience in the period due
to the strength and diversity of the product offering .
Financial Highlights
-- Revenues up 39% to GBP3.01 million (H1 2019: GBP2.17 million)
-- Administrative expenses reduced by 18% to GBP2.90 million (H1 2019: GBP3.54 million)
-- Loss before tax reduced by 75% to GBP0.43 million (H1 2019: GBP1.74 million loss)
-- Loss per share of 1.5 pence per share (H1 2019: loss of 7.7 pence per share)
-- Operational cash outflow reduced by over 85% to GBP0.16 million (H1 2019: GBP1.23 million)
-- Cash balance of GBP1.96 million at 30 June 2020 (31 December 2019: GBP0.90 million)
-- Raised GBP1.28 million after costs in an equity fundraising in March 2020
Operational Highlights
-- New orders confirmed in the period increased 87% to GBP4.93
million (H1 2019: GBP2.64 million)
-- Contracted order backlog up 30% since the end of 2019 to
GBP7.38 million at 30 June 2020 (31 December 2019: GBP5.69 million,
30 June 2019: GBP6.34 million)
-- Major contract wins across all product families and at all stages of clinical development
-- Operational delivery slowed by the COVID-19 pandemic, but
financial impact offset by revenue from increased order backlog
-- Cut operating expenses in line with commitments set at the beginning of the year
-- R&D spend of GBP0.77 million (H1 2019: GBP0.89 million)
and two significant grant awards notified totalling GBP0.48
million, the majority of which will be recognised over three
years
Commenting on the results Matthew Stork, Chief Executive Officer
of Cambridge Cognition, said: "The first half of 2020 has seen a
strong performance as we have executed our strategy, albeit in
difficult circumstances, given the COVID-19 pandemic. Our team
adapted quickly to working remotely and has maintained a high level
of customer service and interaction. Orders increased significantly
in the period: we matched the full year order intake for 2019 in
the first half of 2020 and have continued to win new business since
period end. Although a number of clinical trials were delayed
because of COVID-19, the financial impact was more than compensated
for by the new contract wins. Together with the equity fundraising
in March, the order growth has enabled us to improve our cash
position and we are well placed to continue to grow through the
rest of the year and on towards profitability."
Enquiries:
Cambridge Cognition Holdings plc Tel: 01223 810 700
Matthew Stork, Chief Executive Officer press@camcog.com
Nick Walters, Chief Financial Officer
finnCap Ltd (Nomad and Joint Broker) Tel: 020 7220 0500
Geoff Nash/ Simon Hicks (Corporate Finance)
Alice Lane/ Manasa Patil (Corporate Broking)
Dowgate Capital Limited (Joint Broker) Tel: 020 3903 7715
David Poutney/ James Serjeant
IFC Advisory Ltd (Financial PR and Tel: 020 3934 6630
IR)
Tim Metcalfe/ Graham Herring/ Zach
Cohen
The information communicated in this announcement contains
inside information for the purposes of Article 7 of the Market
Abuse Regulation (EU) No. 596/2014.
CHIEF EXECUTIVE OFFICER'S REVIEW
The Company has had a strong performance in H1 2020,
particularly when taken against the backdrop of the COVID-19
pandemic. We have continued to execute our strategy with the aim
of:
-- smoothing our revenues by winning large, longer-term contracts;
-- building a diversified product mix based on CANTAB(TM),
electronic Clinical Outcome Assessments (eCOA) and digital and
voice solutions;
-- focusing on the commercialisation of existing products as a priority over R&D investment;
-- building partnerships to access wider opportunities and geographies; and
-- reducing investment in non-strategic areas.
Orders received in the period totalled GBP4.93 million, compared
to GBP2.64 million in the first half of 2019. This success has
continued post period end, with orders received from 1 January 2020
to 31 August 2020 standing at GBP8.36 million. These contract wins
included significant wins across our CANTAB(TM) software, eCOA and
digital solutions offerings, the three areas of strategic focus.
This contributed to a growth in the contracted order backlog to
GBP7.38 million at 30 June 2020 from GBP5.69 million at 31 December
2019.
This growth has been supported by an equity fundraise to raise
net proceeds of GBP1.28 million in March 2020, which has enabled us
to further invest in both commercialisation plans and research and
development, despite the uncertain trading environment due to the
COVID-19 pandemic. We are grateful to our investors for providing
this financial platform for growth.
Revenues, recognised as our software and associated services are
used, have grown in line with our forecasts and are up 39% on 2019
levels to GBP3.01 million (H1 2019: GBP2.17 million). This is a
major achievement following a difficult year in 2019 and with
COVID-19 as a backdrop.
Revenue growth could have been even stronger but for the
COVID-19 pandemic. During the peak period of the COVID-19 outbreak,
a number of customers temporarily delayed the start of new clinical
trials and a small number of ongoing trials were slowed. We have
actively enabled some customers to continue with clinical trials
during the period, transitioning four to be virtual clinical trials
and this is likely to represent a longer term strategic opportunity
post pandemic. As lockdown restrictions were lifted, clinical trial
sites have resumed working and, at this time, the impact of
COVID-19 on the clinical trials that we are working on is
minor.
A strategic shift in the market because of COVID-19 is expected
to have a longer-term positive impact on our business. There has
been a considerable step-up in interest in virtual clinical trials
and we have taken orders for several new virtual trials over the
period. We can expect that segment of the market to grow and, with
the success we have had in remote clinical testing, we are well
placed to take advantage of this trend.
R&D remains important to continue to position the Company at
the forefront of the sector, though we have been able to reduce
R&D spending as we have been completing developments and
launching new products. To support the R&D programmes, we
continue to apply for grants and this year has already seen the
award of an Innovative Medicines Initiative grant and the
notification of the intended award of a grant to help develop the
digital phenotyping product from Innovate UK, the UK's innovation
agency, subject to their routine checks. The income from these
grants totals GBP0.48 million and the majority will be recognised
over the next three years. R&D spending has been reduced by
12.5% compared to the first half of 2019.
The operational efficiencies made during 2019 and early in 2020
contributed to the greatly reduced loss of GBP0.43 million in the
first half of 2020 compared to the first half of 2019 (H1 2019:
GBP1.74 million). Operational efficiencies have been made across
the Company, though particularly by merging our science and
operations teams in late 2019.
At the start of the COVID-19 pandemic, we made careful plans to
ensure the safety of our staff and to minimise the impact we could
have within the local environment and on our customers and
suppliers. Our staff quickly moved to working from home and all our
systems can be operated remotely. Operational delivery was not
affected by the COVID-19 pandemic and no redundancies were made. We
continue to monitor the situation closely and have contingency
plans in place in case there is another outbreak that reduces
access to clinical trial sites .
Financial Results
As noted above, although revenue was impacted by the COVID-19
pandemic, it still represents a significant improvement compared to
the same period in the prior year. Comparison to H1 2019 is as
follows:
Revenue H1 2020 H1 2019 Change Increase
GBPm GBPm GBPm
Software 1.31 1.20 0.11 9.2%
-------- -------- ------- ---------
Services 1.58 0.93 0.65 69.9%
-------- -------- ------- ---------
Total Software & Services 2.89 2.13 0.76 35.7%
-------- -------- ------- ---------
Hardware 0.12 0.04 0.08 200.0%
-------- -------- ------- ---------
Total Revenues 3.01 2.17 0.84 38.7%
-------- -------- ------- ---------
Notwithstanding certain clinical trial delays due to COVID-19,
software revenue increased by 9.2% on the prior year period due to
the increased number and value of contracts being delivered.
Software revenue is recognised in line with customers' usage of the
product and so the slowdown in clinical trial activity due to
COVID-19 in the period had an impact on the rate of revenue
recognition.
Services revenue has been less impacted by COVID-19 and has
benefitted from more bespoke work contracted and delivered in the
period. As noted above, our ability to service our customers has
been unaffected by the COVID-19 pandemic and with a growth in
demand for digital applications we have successfully grown this
revenue stream in the first half of 2020.
Hardware revenues continue to be a small part of our business.
However, as noted previously, an increasing number of major
customers are asking us to supply and validate hardware for their
studies, often as they wish us to act as sole provider of all
aspects of a project. These projects often relate to the
development of our digital products. We will continue to consider
these projects on the basis of standalone profitability and product
development opportunities, whilst ensuring that any dilutive impact
on our gross margin is fully explained.
Cost of sales increased to GBP0.56 million, in line with the
increase in revenue (H1 2019: GBP0.38 million). The gross margin
for the period was 81.4%, which is similar to the prior year (H1
2019: 82.9%).
Total administrative costs for the period (incorporating sales
and marketing, clinical operations, R&D and general
administration) decreased by 18.1% to GBP2.90 million (H1 2019:
GBP3.54 million). Within this, R&D costs decreased by GBP0.12
million. Savings have been made across the business, with focus on
costs further sharpened due to the COVID-19 pandemic. Savings on
travel and conference attendance will be temporary, and we expect a
gradual increase to pre-COVID-19 levels only when business travel
becomes commonplace again.
The increase in revenues and decreased spend combined to give an
improved EBITDA performance. Reported EBITDA was a loss of GBP0.35
million (H1 2019: GBP1.66 million loss). Losses before tax were
GBP0.43 million (H1 2019: GBP1.74 million loss). The reported loss
per share is 1.5p (H1 2019: 7.7p loss).
Net cash outflow from operations during the period was GBP0.16
million, a sharp decrease from the outflow of GBP1.23 million in
the first half of 2019. The cash outflow is less than the loss for
the period due to the timing of billings and collection generally
being ahead of revenue recognition, as well as the effect of
excluding the non-cash items of depreciation and the share-based
payment charge. The equity fundraising completed in March 2020
raised GBP1.28 million net of costs.
On the balance sheet, current assets (excluding cash) have
increased by GBP0.82 million and current liabilities increased by
GBP1.06m. These movements are principally driven by advance
billing, where bills are raised, but then held in deferred revenue
until revenue is recognised. Share capital and share premium have
increased by GBP1.28 million combined following the equity
fundraising.
Operational Review
There has been an increase in the value of our contracted order
backlog which stood at GBP7.38 million as at 30 June 2020 and
subsequently increased to GBP9.96 million as at 31 August 2020, in
comparison to GBP5.69 million as at 31 December 2019. The
contracted order backlog represents confirmed orders that are not
yet recognised as revenue.
We are delighted that our efforts in two areas of strategic
focus, eCOA and digital health, are resulting in a significant
increase in order intake. We announced large contract wins in each
of these sectors during the first half. No less pleasing is that
orders taken for the core range of CANTAB(TM) assessments for
clinical trials has also grown. This is a result of the focused
commercial activities in this area, with an increase in targeted
marketing and a consistent attention from all managers in the
Company to winning orders, supported by the new Chief Commercial
Officer who joined in February 2020.
We launched the upgraded eCOA solution in 2019 with the goal of
cross-selling to existing customers and that is proving successful.
We have seen a considerable increase in orders where customers use
two or even three of our portfolio of products, for example using
CANTAB(TM), digital and an eCOA solution. Over the course of the
first half of 2020, we have won several eCOA only orders, including
one large order for a non-CNS clinical trial from an existing
client. Over the course of the first half of 2020, we have
configured more new eCOA instruments for clients under contract and
we plan to continue developing new instruments through H2 2020 and
beyond.
Cambridge Cognition continues to make major advances in the
digital health arena, emphasising that this is a substantial
long-term opportunity for the Company's technology in this field.
The need and desire to conduct virtual clinical trials and
near-patient testing has increased further due to the COVID-19
pandemic. Additionally, use of daily assessments to assess drug
efficacy in clinical trials or to provide patients with better care
with digital aids continues to grow. Each digital solution
typically comprises a short-form, quick cognitive assessment
together with other modules, such as medication reminders or a
diary for noting symptoms. Over the course of the first half of
2020, we delivered three such digital apps to clients, building a
number of new modules that we now have available for future
clients.
Our Neurovocalix(TM) voice-based assessment solution continues
to be the primary development project of the R&D team.
Neurovocalix(TM) is a platform that can administer automated
voice-based health assessments and conducts machine learning
analysis of the results. We have demonstrated the ability to
conduct large studies and also that we can use our AI system to
measure cognitive load from voice samples. Proof-of-concept
clinical trials that we started in 2019 using our prototype
solution, which are funded by pharmaceutical companies, are going
well and we are currently developing a production version of the
system. There continues to be a high degree of interest in
NeuroVocalix(TM) at scientific conferences and our team presents
regularly on its capabilities and advancements.
The digital phenotyping programme, using electronic visual
cognitive tests to identify sub-populations of patients who should
respond well to specific drug classes, has also progressed well,
albeit being considerably delayed due to the COVID-19 pandemic. As
noted above, the programme has recently received notification of a
substantial Innovate UK grant to conduct initial work in this area.
The Company continues to support this venture at its early stage
while actively seeking investment from venture partners with the
intention of spinning out the programme into a new business to
further reduce R&D costs.
We have remained at the forefront of scientific development in
the field, being part of a successful consortium of 46 leading
industry and academic partners awarded a prestigious Innovative
Medicines Initiative grant. It is a strong endorsement as we are
the sole provider of cognitive assessments for the project and we
are also gaining insights in assessing fatigue and sleep
disturbances using wearable and portable digital technology.
We are also delighted to be involved in two ground-breaking
collaborations. The first is measuring stress recovery in frontline
healthcare workers caring for COVID-19 patients and is to be done
virtually. This will assess levels of stress and hence potential
impacts on mental and physical health, and potentially even
susceptibility to COVID-19 itself. The second is the inclusion of
CANTAB(TM) in the Brain Health Registry, a self-enrolment platform
collecting longitudinal information on brain health that is run by
the University of California, San Francisco.
Outlook
As stated, the Company's contracted order backlog has
strengthened considerably since 30 June 2020 to stand at GBP9.96
million as at 31 August 2020. Of the total contracted orders
received to 31 August 2020, GBP3.46 million is expected to be
recognised in the second half of 2020 and GBP4.10 million is
expected to be recognised in 2021. The actual date this revenue is
recognised will depend on clinical trials completing on schedule.
While the risk of further major global outbreaks of COVID-19
infections continues, we remain cautious but demand for the
Company's products is strong even if there are subsequent delays in
delivery.
We continue to focus on commercialising our technology, driving
new lead generation which has led to a strong qualified orders
pipeline for the rest of 2020 and into early 2021. As evidenced by
the contracts won in the first half, there is strong demand for our
technology in the market and we are well placed to deliver further
revenue growth.
We have reduced our cost base over the past 12 months, though we
will continue to monitor our resource needs closely and costs will
need to be increased in certain areas as more contracts are being
supported. We expect to meet our previously stated aim to breakeven
in Q4 2020.
The strong H1 2020 performance and fund raising in March has
strengthened the Company's cash position and the Board believes
that the Company has sufficient cash reserves to drive the business
to profitability even if there is a resurgence in the COVID-19
pandemic. Of course, if there is a major resurgence of COVID-19,
there is the risk of a further financial impact, but we are well
placed to withstand that scenario.
As we progress the commercialisation of our portfolio and
platforms, we look forward to growing our body of knowledge and
experience which will allow us to expand and scale up our eCOA
capability, digital solutions and our voice-based clinical trial
platform; all of which are in important areas of growth. Plans to
expand our sales and marketing capacity are being executed. Though
there remains some uncertainty in our markets and the broader
economy, we look forward to continued growth in H2 2020 and on into
2021.
Matthew Stork
Chief Executive Officer
22 September 2020
CONDENSED CONSOLIDATED COMPREHENSIVE INCOME STATEMENT
For the six months ended 30 June 2020
6 months 6 months Year to
to 30 June to 30 June 31 December
2020 2019 2019
Unaudited Unaudited Audited
Note GBP'000 GBP'000 GBP'000
------------ ------------ -------------
Revenue 5 3,010 2,174 5,042
Cost of sales (559) (378) (1,149)
------------ ------------ -------------
Gross Profit 2,451 1,796 3,893
Administrative expenses (2,900) (3,540) (7,011)
Other income 26 3 5
Finance costs (5) (1) (4)
------------ ------------ -------------
Loss before tax (428) (1,742) (3,117)
Income tax 4 (1) 216
------------ ------------ -------------
Loss for the period (424) (1,743) (2,901)
============ ============ =============
Earnings per share (pence) 6
Basic and diluted (1.5) (7.7) (12.4)
All amounts are attributable to equity holders in the parent
Loss for the period (424) (1,743) (2,901)
Other comprehensive income - items
that may be reclassified subsequently
to profit or loss
Exchange differences on translation
of foreign operations (153) (3) 87
------ -------- --------
Total comprehensive income for
the period (577) (1,746) (2,814)
====== ======== ========
Consolidated statement of financial position
At 30 June 2020
At 30 June At 30 June At 31 December
2020 2019 2019
Unaudited Unaudited Audited
GBP'000 GBP'000 GBP'000
----------- ----------- ---------------
Assets
Non-current assets
Intangible assets 382 398 385
Property, plant and equipment 69 195 117
----------- ----------- ---------------
Total non-current assets 451 583 502
Current assets
Inventories 47 53 53
Trade and other receivables 2,529 1,506 1,703
Cash and cash equivalents 1,959 2,057 901
----------- ----------- ---------------
Total current assets 4,535 3,616 2,657
----------- ----------- ---------------
Total assets 4,986 4,199 3,159
=========== =========== ===============
Liabilities
Current liabilities
Trade and other payables 5,163 4,082 4,103
- 40 -
Non-current liabilities
Other non-current payables
Total liabilities 5,163 4,122 4,103
----------- ----------- ---------------
Equity
Share capital 312 242 242
Share premium account 11,151 9,943 9,943
Other reserves 5,865 5,928 6,018
Own shares (81) (94) (81)
Retained earnings (17,424) (15,942) (17,066)
----------- ----------- ---------------
Total equity (177) 77 (944)
----------- ----------- ---------------
Total liabilities and equity 4,986 4,199 3,159
=========== =========== ===============
Consolidated statement of changes in equity
Share Share Other Own Retained
capital premium reserve shares earnings Total
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
------------------------ --------- --------- --------- -------- ---------- --------
Balance at 1 January
2019 207 7,707 5,931 (94) (14,277) (526)
(Loss) for the
period - - - - (1,743) (1,743)
Other comprehensive
income - - (3) - - (3)
--------- --------- --------- -------- ---------- --------
Total comprehensive
income for the
period - - (3) - (1,743) (1,746)
--------- --------- --------- -------- ---------- --------
Issue of new share
capital 35 2,465 - - - 2,500
Share issue costs - (229) - - - (229)
Credit to equity
for share based
payments - - - - 78 78
--------- --------- --------- -------- ---------- --------
Transactions with
owners 35 2,236 - - 78 2,349
--------- --------- --------- -------- ---------- --------
Balance at 30 June
2019 242 9,943 5,928 (94) (15,942) 77
Balance at 1 July
2019 242 9,943 5,928 (94) (15,942) 77
Profit for the
period - - - - (1,158) (1,158)
Other comprehensive
income - - 90 - - 90
--------- --------- --------- -------- ---------- --------
Total comprehensive
income for the
period - - 90 - (1,158) (1,068)
--------- --------- --------- -------- ---------- --------
Transfer on allocation
of shares held
in trust - - - 13 (13) -
Credit to equity
for share based
payments - - - - 47 47
--------- --------- --------- -------- ---------- --------
Transactions with
owners - - - 13 34 47
--------- --------- --------- -------- ---------- --------
Balance at 31 December
2019 242 9,943 6,018 (81) (17,066) (944)
------------------------ --------- --------- --------- -------- ---------- --------
Balance at 1 January
2020 242 9,943 6,018 (81) (17,066) (944)
(Loss) for the
period - - - - (424) (424)
Other comprehensive
income - - (153) - - (153)
--------- --------- --------- -------- ---------- --------
Total comprehensive
income for the
period - - (153) - (424) (577)
--------- --------- --------- -------- ---------- --------
Issue of new share
capital 70 1,330 - - - 1,400
Share issue costs - (122) - - - (122)
Credit to equity
for share based
payments - - - - 66 66
--------- --------- --------- -------- ---------- --------
Transactions with
owners 70 1,208 - - 66 1,344
--------- --------- --------- -------- ---------- --------
Balance at 30 June
2020 312 11,151 5,865 (81) (17,424) (177)
--------- --------- --------- -------- ---------- --------
Consolidated statement of cash flows
For the 6 months ended 30 June 2020
6 months 6 months Year to
to 30 June to 30 June 31 December
2020 2019 2019
Unaudited Unaudited Audited
Note GBP'000 GBP'000 GBP'000
------------ ------------ -------------
Net cash flows from operating activities 7 (163) (1,228) (2,320)
Investing activities
Interest on bank deposits 2 3 5
Purchase of intangible assets - (40) (40)
Purchase of property, plant and
equipment (22) (14) (15)
------------ ------------ -------------
Net cash flow used in investing
activities (20) (51) (50)
Financing activities
Proceeds from the issue of share
capital net of costs 1,278 2,271 2,271
Finance lease payments (57) (57) (113)
------------ ------------ -------------
Net cash flows from financing activities 1,221 2,214 2,158
Net (decrease)/ increase in cash
and cash equivalents 1,038 935 (212)
Cash and cash equivalents at start
of period 901 1,110 1,110
Exchange differences on cash and
cash equivalents 20 12 3
------------ ------------ -------------
Cash and cash equivalents at end
of period 1,959 2,057 901
============ ============ =============
NOTES TO THE INTERIM FINANCIAL STATEMENT
1. General information
Cambridge Cognition Holdings plc ('the Company') and its
subsidiaries (together, 'the Group') develops and markets digital
solutions to assess brain healt h for sale worldwide, principally
in the UK, the US and Europe.
The Company is a public limited company listed on the
Alternative Investment Market ('AIM') of the London Stock Exchange
(symbol COG) and is incorporated and domiciled in the UK. The
address of its registered office is Tunbridge Court, Tunbridge
Lane, Bottisham, Cambridge, CB25 9TU.
The condensed consolidated interim financial statements were
approved by the Board of Directors for issue on 21 September 2020.
The condensed consolidated interim financial statements do not
comprise statutory accounts within the meaning of section 434 of
the Companies Act 2006.
Statutory accounts of the Group for the year ended 31 December
2019 were approved by the Board of Directors on 29 June 2020 and
delivered to the Registrar of Companies. The report of the auditors
on those accounts was unqualified, did not contain an emphasis of
matter paragraph and did not contain any statement under section
498 of the Companies Act 2006.
The condensed consolidated interim financial statements together
with the comparative information for the six months ended 30 June
2019 have not been audited.
2. Basis of preparation
Going concern basis
The Group's forecasts and projections, taking account of
reasonably possible changes in trading performance, support the
conclusion that there is a reasonable expectation that the Group
has adequate resources to continue in operational existence for the
foreseeable future, a period of not less than twelve months from
the date of this report. The Directors also believe that the Group
is able to survive the consequences of reasonably forecastable
impacts of a resurgence of the COVID-19 pandemic. The Group
therefore continues to adopt the going concern basis in preparing
its condensed consolidated interim financial statements.
3. Accounting policies
The accounting policies adopted in the preparation of the
condensed consolidated interim financial statements are consistent
with those followed in the preparation of the Group's consolidated
financial statements for the year ended 31 December 2019.
4. Critical accounting judgements and key sources of estimation
uncertainty
In the application of the Group's accounting policies the
directors are required to make judgements, estimates and
assumptions about the carrying amounts of assets and liabilities
that are not readily apparent from other sources. The estimates and
associated assumptions are based on historical experience and other
factors that are considered to be relevant. Actual results may
differ from these estimates.
The estimates and underlying assumptions are reviewed on an
ongoing basis.
The following are the critical judgements that the directors
have made in the process of applying the Group's accounting
policies.
Revenue recognition
Judgements may be required in recognising revenue and cost.
These judgements include
-- The extent to which, and the way in which, contracts are
separated into their component parts and the values attributed to
those parts;
-- Whether software licences are granted to allow the customer
the benefit of use of our intellectual property over a period of
time (including benefitting from future maintenance and
improvements) or whether that right is given as the intellectual
property exists at the point of time the licence is granted. In the
case of the former, software is recognised over the period of use,
for the latter revenue is recognised when the licence commences and
the customer is able to use the software;
-- The adoption of the portfolio approach for lower value sales
and the recognition criteria applied;
-- Where performance obligations are satisfied over time, the
length of time remaining for performance, and whether this needs
revising over time; and
-- The length of time for performance also dictates the initial
deferral and subsequent recognition of commissions in cost of
sales.
Goodwill
The Group reviews the carrying value of its goodwill balances by
carrying out impairment tests at least on an annual basis. These
tests require estimates to be made of the value in use of its CGUs
which are dependent on estimates of future cash flows and long-term
growth rates of the CGUs.
Capitalisation of development costs
The point at which development costs meet the criteria for
capitalisation is critically dependent on management judgment of
the probability of future economic benefits.
Recovery of deferred tax assets
Deferred tax assets have not been recognised for deductible
temporary differences, share options and tax losses as management
considers that there is not sufficient certainty that future
taxable profits will be available to utilise those temporary
differences and tax losses.
Share-based payment transactions
The Group measures the cost of equity-settled transactions with
employees by reference to the fair value of the equity instruments
at the date at which they are granted. The fair value is determined
using either a Black-Scholes model or a Binomial Option model. The
accounting estimates and assumptions relating to equity settled
share-based payments would have no impact on the carrying amounts
of assets and liabilities within the next annual reporting period
but may impact profit and loss and equity.
5. Segmental information
The analysis of revenue by product type is as follows:
6 months
to 30 June 6 months to Year to 31 December
2020 30 June 2019 2019
GBP'000 GBP'000 GBP'000
Software 1,310 1,203 2,526
Services 1,583 936 2,339
Hardware 117 35 177
3,010 2,174 5,042
============ ============== ====================
6. Earnings per share
Calculation of loss per share is based on the following loss and
numbers of shares:
6 months 6 months Year to
to 30 June to 30 June 31 December
2020 2019 2019
GBP'000 GBP'000 GBP'000
Earnings
Earnings for the purposes of basic and
diluted earnings per share being net loss
attributable to owners of the Company (424) (1,743) (2,901)
'000 '000 '000
Number of shares
Weighted average number of ordinary shares
for the purposes of basic EPS 28,429 22,717 23,414
------------ ------------ -------------
Weighted average number of ordinary shares
for the purposes of diluted EPS 28,429 22,717 23,414
------------ ------------ -------------
The basic weighted average number of shares excludes shares held
by an Employee Benefit Trust. Fully diluted earnings per share is
calculated after showing the effect of outstanding options in
issue. For all of the periods presented, the effect of the options
would be to reduce the loss per share, and hence the diluted loss
per share is the same as the basic loss per share.
The number of shares in issue at 30 June 2020 was 31,170,903 (31
December 2019: 24,170,903).
7. Reconciliation of operating result to operating cash
flows
6 months 6 months
to 30 June to 30 June Year to 31
2020 2019 December 2019
GBP'000 GBP'000 GBP'000
Loss before tax (428) (1,742) (3,117)
Adjustments for:
Depreciation of property plant
and equipment 70 78 157
Amortisation of software licences 3 3 5
Share-based payments charge 66 78 125
Finance costs 5 1 4
Interest received (2) (3) (5)
Operating cash flows before
working capital movements (286) (1,585) (2,831)
Change in inventories 6 (28) (27)
Change in trade and other
receivables (917) 286 148
Change in trade and other
payables 1,027 31 110
------------ ------------ ---------------
Cash used by operations (170) (1,296) (2,600)
Taxation received 7 68 280
------------ ------------ ---------------
Net cash flows from operations (163) (1,228) (2,320)
------------ ------------ ---------------
8. Copies of interim financial statements
Copies of the interim financial statements are available from
the Company at its registered office at Tunbridge Court, Tunbridge
Lane, Bottisham, Cambridge, CB25 9TU. The interim financial
information document will also be available on the Company's
website www.cambridgecognition.com .
This information is provided by RNS, the news service of the
London Stock Exchange. RNS is approved by the Financial Conduct
Authority to act as a Primary Information Provider in the United
Kingdom. Terms and conditions relating to the use and distribution
of this information may apply. For further information, please
contact rns@lseg.com or visit www.rns.com.
RNS may use your IP address to confirm compliance with the terms
and conditions, to analyse how you engage with the information
contained in this communication, and to share such analysis on an
anonymised basis with others as part of our commercial services.
For further information about how RNS and the London Stock Exchange
use the personal data you provide us, please see our Privacy
Policy.
END
IR FLFIDAIILFII
(END) Dow Jones Newswires
September 22, 2020 02:00 ET (06:00 GMT)
Cambridge Cognition (LSE:COG)
Historical Stock Chart
From Apr 2024 to May 2024
Cambridge Cognition (LSE:COG)
Historical Stock Chart
From May 2023 to May 2024